Good credit is important for everyone—a healthy credit score ensures that you get the best rate on home and auto loans from your credit union. Keep reading to learn more about some common credit mistakes and how you can avoid making them in order to keep your credit score high.
1. Missing Payments or Paying Bills Late
Every time you make a late payment, it’s reflected in your credit report. You can begin to mitigate bad payments by paying your bills as soon as possible instead of letting them go for months. The best way to avoid this credit mistake is to either establish direct payment through your credit union or set up an automatic reminder on your computer or phone to remind you when payments are due.
2. Closing Credit Card Accounts
Closing a credit card account lowers your credit score—having less available credit or lower maximum credit can reflect poorly on your score. Instead of closing the account, keep the card and use it for small purchases every so often so you can continue to build credit and on-time payments to keep your credit score high.
3. Having No Credit
Lack of credit can severely hurt your chances of obtaining a loan or future line of credit when you have nothing to demonstrate your reliability as a borrower. When you apply for a loan or credit card, your credit union will want a record of your past history of bill payments. Instead of avoiding credit cards altogether, simply use them for small purchases and be sure to pay your bills on time. You can also establish credit through rent payments, phone bill payments, and car payments.
Start building good credit today with a credit card from GCS Credit Union in O’Fallon, IL. We offer great rates on our Visa credit cards and can also help you obtain your credit score for your own records and benefit. For more information, visit us online or call (618) 219-8600.